The Central Bank of Nigeria, CBN, has kick-started some key steps towards consolidating the policy measures recently launched policy on cashless economy,.
This is in respect of the new policies of naira redesign and establishment of new limits on cash withdrawal from banks. The policies are geared towards effective monetary policy and security environment while taming corruption.
The CBN indicated that the policy has recorded some achievements setting the base for the new reinforcements.
The key steps includes the commencement of a nationwide stakeholder engagement and sensitization to promote understanding of the cashless policy, particularly in rural areas, markets and underserved communities across the six geopolitical zones of the country.
The apex bank, in conjunction with Bankers Committee and Share Agents Network Expansion Facility, SANEF, is also strengthening the Agent Network Capacity by intensifying agent rollouts across the country (especially underserved locations) and enhance Agents’ ability to carry out a wider variety of financial services in addition to 12 Classified as Confidential cash-in and cash-out (electronic card distribution, wallet/account opening, BVN onboarding, bills payment, etc).
A geospatial map of available financial access points is also being completed and the apex bank said it shall be made public to inform all stakeholders of the locations of physical and electronic financial access points where they can process transactions electronically.
The CBN promised to continue to be flexible in its implementation of cashless policy and monitor its impact especially on vulnerable segments of the society but ensure the multiple advantages are achieved.
In response to the Naira redesign policy, banks’ vaults have recorded about N190 billion inflow as Currency Outside Banks, COB, fell by 6.7 per cent month-on-month in November to N2.64 trillion from N2.83 trillion in November 2022.
The N2.64 trillion COB in November represents the lowest in 12 months since October 2021.
Further reflecting the impact of the CBN cashless policy, currency-in-circulation (CIC) similarly fell month-on-month (MoM) by 4.0 percent, to N3.16 trillion in November from N3.29 trillion.
Recall that the CBN Governor, Mr. Godwin Emefiele, on October 26, announced the redesigning of the naira notes in denomination of N200, N500 and N1,000 in October, citing persisting concerns with the management of the current series of banknotes among other things.
Consequently, the CBN directed that bank customers must deposit the old notes by January 31st when they will cease to be legal tender, while the new notes were released into circulation on December 15th.
According to Emefiele, one of the challenges primarily include: significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks.
He said as at the end of September 2022, available data at the CBN indicate that N2.73 trillion out of the N3.23 trillion currency in circulation was outside the vaults of commercial banks across the country.
Achievements of cashless policy
Meanwhile the CBN Deputy Governor, Financial System Stability, Mrs Aisha Ahmed, has reeled out the achievements of the cashless policy since its first phase in 2012 to date.
Addressing the national Assembly on the twin policies last week Ahmed stated: ‘‘The implementation of the cashless policy was a critical element that catalyzed the transformation being witnessed in the Nigerian financial and payments system.’’
She listed some of the key achievements to include: Expansion in financial access points (ATM, PoS, Agents and mCash); Proliferation of e-payment Platforms; Growth in electronic channels adoption; Enhancement financial inclusion; International Recognition of Nigeria’s Payment System & growth in vibrant fintech ecosystem; Positive impact on GDP; and Financial resilience of citizens during COVID.
On the revised cash withdrawal limit, she noted that the CBN is not unmindful of the concerns raised in response to the new limits and would remain flexible to make the necessary adjustments to ensure wider public acceptance of the policy.
This, according to her necessitated the upward reviewe of the cash withdrawal limits to N500,000 weekly for individuals (from N100,000) and N5,000,000 weekly for corporates (from N500,000).
Furthermore, the applicable charges above the limit have been reduced to 3% and 5% respectively. Mobile money agents who provide cash-in cash-out services in rural areas have also been recognized and provided for in the revised guidelines.